This paper examines data for 12,868 individuals from the National Longitudinal Survey of Youth (NLSY79) from 1979 through 2010 to explore certain financial incentives of marriage. In particular, this paper focuses on identifying the combination of occupations that decreases idiosyncratic income volatility to the greatest extent. For the sake of this paper, marriage is defined as the combination of two separate assets into a single portfolio. With such, I derive the efficient frontier for each occupation and gender. In the process, reward-to-volatility and mean-variance utility maximization techniques are introduced. Ultimately, applying modern portfolio theory to the marriage market allows one to examine the economic incentives of marriage in a way that has not previously been done. On the whole, the analysis confirms previous literature on marriage dynamics, while offering a new framework for analysis.
| Identifer | oai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-2065 |
| Date | 01 January 2015 |
| Creators | Whiting, Cameron |
| Publisher | Scholarship @ Claremont |
| Source Sets | Claremont Colleges |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | CMC Senior Theses |
| Rights | © 2014 Cameron Whiting, default |
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